Bitcoin is not a currency and should not be considered as one.

[Ilanoh]

Hi guys,

I was thinking about bitcoin lately.

For me it is not a currency and we should not buy common goods with it.

For the free market to stay free, it should not be considered as a currency, because government will be able to tax you for it.

For me the real purpose of bitcoin, and were it has actual intrinsic (maybe intrinsic is not the right word, but you get me) value, is that bitcoin is to money, what money is to common goods.

It let you abstract the value of money, like money abstract the value of goods, to be able to do a lot of cool stuff!

The concept of bitcoin is what Keynes wanted to create after the war, but he was kinda putted apart from the negotiations in Breton Wood (and other meetings), by the Americans, because they wanted their currency to have the supremacy. They still gave him some important position in the monetary regulation, but still, the etalon-$ was imposed.

Today the hacker world have created what Keynes was not able to create.

I think that Keynes ideas are good because, what he suggested, and predicted after WW1, was correct, and governments should have listened to him and to the Jewish german bankers of that time. It would had let germany more freedom, and it would have gave a greater chance to not choose what they choose to do... They were both (Keynes and Jewish german bankers) very strongly against the occidental oppression of germany.

So in conclusion bitcoin is good to transfer money easily and freely. The value of bitcoin is not very important, if you want to transfer 100,000$, you don't care if you need to transfer 100BTC or 10BTC, because it's the same to transfer 10 or 100. Knowing this, the value has to go up, because miners won't put new bitcoins on the market, if it is under the price they have paid to mine it. And you won't care buying 1 bitcoin 10,000$ because it still does what you need to do at the same cost.

Maybe a derivative currency based on bitcoin can be good to buy common goods, because it would avoid us to pay VAT, that is 20% in France. Or income tax for business, since in the books, it's possible to have something coherent without money income (I still need to study that a little deeper). And it would give independence to bitcoin in regard to $.

[cdog]

Please use the search function and dont create new posts for topics which have substantial discussions already.

Hopefully a mod can merge your post.

[User_513]

Ooh, a post by a Keynesian telling us all why Bitcoin isn't money. I'll make sure to pay lots of attention to this one.

[hilariousandco]

For me it is not a currency and we should not buy common goods with it.

For the free market to stay free, it should not be considered as a currency, because government will be able to tax you for it.

For me the real purpose of bitcoin, and were it has actual intrinsic (maybe intrinsic is not the right word, but you get me) value, is that bitcoin is to money, what money is to common goods.

Who are you to decide what is and isn't money? You sound like a government. I think the people and users will decide whether it's a currency or not, and I vote it is.

[BCB]

Regardless of whether Bitcoin is not a currency or should not be considered a currency it is in fact being used as a currency.  It is also being used as an asset and a security and an store of value... etc. 

No stopping it regardless of what the armchair economic theorists say.

[hilariousandco]

Regardless of whether Bitcoin is not a currency or should not be considered a currency it is in fact being used as a currency.  It is also being used as an asset and a security and an store of value... etc. 

No stopping it regardless of what the armchair economic theorists say.

Exactly. Would you be worried about government involvement if people started using potatoes as currency?

[BCB]

Regardless of whether Bitcoin is not a currency or should not be considered a currency it is in fact being used as a currency.  It is also being used as an asset and a security and an store of value... etc. 

No stopping it regardless of what the armchair economic theorists say.

Exactly. Would you be worried about government involvement if people started using potatoes as currency?

If enough people started trading potatoes and the value of the potato money supple reached a certain level you can bet the government would get involved. 

Especially if there at a black market website for illicit good that only accepted potatoes. 

But then McDonald's, at the world's largest buyer of potatoes would hire a lobbying group for millions of dollars to prevent potatoes from being used as money and stating they can only be used for french fries, home fries and mashed potatoes. 

[hilariousandco]

Regardless of whether Bitcoin is not a currency or should not be considered a currency it is in fact being used as a currency.  It is also being used as an asset and a security and an store of value... etc. 

No stopping it regardless of what the armchair economic theorists say.

Exactly. Would you be worried about government involvement if people started using potatoes as currency?

If enough people started trading potatoes and the value of the potato money supple reached a certain level you can bet the government would get involved. 

I'm sure they would. Bitcoin is going to be regulated whether people like it or not. Governments are not going to just sit back and let people launder money freely.

[Ilanoh]

For me it is not a currency and we should not buy common goods with it.

For the free market to stay free, it should not be considered as a currency, because government will be able to tax you for it.

For me the real purpose of bitcoin, and were it has actual intrinsic (maybe intrinsic is not the right word, but you get me) value, is that bitcoin is to money, what money is to common goods.

Who are you to decide what is and isn't money? You sound like a government. I think the people and users will decide whether it's a currency or not, and I vote it is.

I just give my opinion, you're free to do so also

[BCB]

I don't think it's that regulation we have to worry about (though that has already created a significant hurdles).  Taxation will be the real threat to bitcoin.

[Ilanoh]

Ooh, a post by a Keynesian telling us all why Bitcoin isn't money. I'll make sure to pay lots of attention to this one.

Actually I'm saying that Keynes's idea to bring a better monetary system was to create a concept that bitcoins is representing today. He didn't named his currency bitcoin, either he didn't have any idea of internet and stuff, but the concept are the same.

http://en.wikipedia.org/wiki/Bancor

I think the same about taxation.

[benzone]

The less Bitcoin is usable, more of a bubble it is. If we don't get to a point where goods are massively sold for BTC directly, we just let the BTC exchanges take commissions instead of banks.

[LRCGROUP]

Are you seeing BitCoin as an alternate version of SWIFT?

[dissident]

I used to think it wasn't money but I've been swayed. Actually with a fixed supply it resembles more a commodity but money is anything people give value really.  What would be interesting is if someone, a large bank for example, created a crypto currency backed by gold or silver with a fixed supply... it might help keep the price stable and being able to exchange your currency for metal for a small fee would be an interesting idea.

[BCB]

Are you seeing BitCoin as an alternate version of SWIFT?

Eventually.  Could be years and with probably won't be bitcoin but a later iteration.

[BCB]

I used to think it wasn't money but I've been swayed. Actually with a fixed supply it resembles more a commodity but money is anything people give value really.  What would be interesting is if someone, a large bank for example, created a crypto currency backed by gold or silver with a fixed supply... it might help keep the price stable and being able to exchange your currency for metal for a small fee would be an interesting idea.

The volatility comes from a very shallow liquidity pool.  You have to understand that even with over 12 million bitcoin mined only about 5 million are actually in circulation (and that may be and over estimate).  Past block chain analysis has shown that over 7 million bitcoin are being horded.  Transaction analysis shows those coins having been received or mined and never having been transferred again. 

So when a country like China jumps on and off the band wagon off course there are going to be wild fluctuation.

[skivrmt]

I don't think it's that regulation we have to worry about (though that has already created a significant hurdles).  Taxation will be the real threat to bitcoin.

I do see taxation as a threat.  If governments can't tax at least -some- part of Bitcoin, they will do everything in their power to block it.  If you trade bitcoin, make a profit, you are legally required to pay a tax on the gain, whether a short term gain or long term gain.

[BCB]

Here are a couple of taxation scenarios.

If you are a miner the GOV could tax your block reward and fee on receipt as income.

Then at the time you convert those coins to fiat you could also be taxed with a capital gains if the price increased.

In Countries where there is a Value Added Tax (VAT) they could put a premium on bitcoin transactions and make its use more expensive then credit cards and other forms of payment.

For the regular user/trader  I would expect that bitcoin earnings or loss would be taxed as a capital gain or loss at the very least.

Lot of theories and speculation out there.

I'd expect a US IRS ruling before April 15, 2014.

[Ilanoh]

I will never declare to any gov that I own bitcoin that's for sure!

And when I cashout, if I'm asked, I will just say that I sold, cryptographic private keys, that were valuable to some random people, for research or any kind of stuff, to unlock stuff with it.

If they still want to tax it, I would direct myself to banks in Swiss or something like that. In a legal way of course, by becoming a swiss taxpayer.


Exactly I see bitcoin like SWIFT in a certain way, but not exactly.

[LRCGROUP]

I don't think it's that regulation we have to worry about (though that has already created a significant hurdles).  Taxation will be the real threat to bitcoin.

I do see taxation as a threat.  If governments can't tax at least -some- part of Bitcoin, they will do everything in their power to block it.  If you trade bitcoin, make a profit, you are legally required to pay a tax on the gain, whether a short term gain or long term gain.

This is a fork in the road where you have to choose the lesser of two evils.  You ether play ball or you play against.  One hand washes the other principle.  If BitCoin really takes off a whole new industry will emerge on a grand scale.  It is understandable some form of tax needs to be in place.  You want the support.  Everyone wins.  

It may sound a bit against the grain of the wood, but I believe there should also be transaction costs to ensure everyone that secures that transaction gets a piece of the pie.  Everyone is the infrastructure and BitCoin keeps the family feed.  This would be spreading the wealth on a major grand scale.